For immediate release: Thursday, 20 May 2010

Oxfam: NZ Falls Further Behind In Its Overseas Aid Budget

New Zealand has today failed to honour its promise to help the poorest communities in the world work their way out of poverty, international development agency Oxfam New Zealand says.

The government has failed to increase its overseas development assistance programme (ODA) as had been planned under the spending commitments of the previous government. It remains static at $524million. This makes it clear that New Zealand is one of the world’s laggards when it comes to meeting its United Nations commitment of allocating 0.7 per cent of Gross National Income (GNI) to development aid by 2015.

According to the OECD, New Zealand’s development aid allocation was just 0.29 per cent of GNI in 2009 - less than half the UN target. This budget announcement today does nothing to lift the level of spending in line with our international commitments and the urgent needs of the world’s poor.

“With the poorest regions in the world, including our Pacific neighbours, being hit hardest by the impacts of the global economic recession and climate change, it is the worst possible moment for richer countries like New Zealand to retreat from our international commitments,” says Barry Coates, Executive Director of Oxfam New Zeaand.

As a consequence of the economic crisis alone, Oxfam estimates poor countries now need an additional $46 billion to cover their financing needs.

“Most New Zealanders think we are good global citizens. Sadly, when it comes to government aid for poor countries that is not the case,” Coates adds.

Five countries already exceed the UN target (Sweden, Luxembourg, Denmark, the Netherlands and Belgium) and the 27 members of the EU as a whole have committed to reaching the target by 2015. Australia has committed to substantial increases to achieve 0.5 per cent by 2015.

AID WORKS

Oxfam’s new report, 21st Century Aid: Recognising Success and Tackling Failure, provides a wealth of evidence and examples showing that effective aid saves lives and can transform the prospects of millions of people in poverty. The report challenges the critics of international aid and finds that, while there is much room for reform, god quality aid is crucial in building the infrastructure and capabilities that will unlock people™s ability to work their way out of poverty.

“There are valid criticisms of aid that it is used to benefit the interests of the donor rather than the recipient, but this does not detract from the effectiveness of government aid that is well managed and well targeted at the needs of people living in poverty,” said Coates. “Aid is vital in strengthening the ability of poor coutries to reduce poverty, mobilise domestic revenues, and create the conditions for long-term private and public investment.

FUNDING CLIMATE CHANGE

Oxfam, along with other agencies, is calling for developed countries to provide climate finance that is additional to ODA commitments, to help poor countries adapt to the impacts of climate change. Oxfam estimates that New Zealand should be contributing an additional $47m per year over the next three years to the fast start climate financing initiative that was agreed in the Copenhagen Accord December 2009. It is disappointing that the government has today announced it will only be contributing $300,000.

“It is evident today New Zealand isn’t willing to pay its fair share of the annual bill that we signed up to in Copenhagen. It is crucial that New Zealand supports our Pacific neighbours and other vulnerable countries suffering the impacts of climate change,” added Coates.

One proposal, the Financial Transaction Tax, is gaining support internationally as a mechanism for raising revenues to support poverty reduction and mitigate the impacts of climate change. The tax could help raise the hundreds of billions of dollars that is needed over the long term.

Coates:
“A number of leading governments, economists, financial regulators and recently the IMF have all come out in support for a tax on the financial sector to curb excess speculation and raise revenues.

”Our government should look seriously at how a financial transactions tax can contribute to deficit reduction and our international obligations.”

ENDS/

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